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tv   Nightly Business Report  PBS  June 25, 2014 7:00pm-7:31pm PDT

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this is "nightly business report" with tyler mathisen and susie gharib. >> must see tv, the supreme court hands the television industry a major victory sending shares of media companies higher and could have far-reaching implications for the sector. >> economic stunner, growth contracted, almost 3% in the first quarter, so why are investors brushing it off? >> and oil slick, could big changes becoming to the energy industry and what might that mean for prices here at home? that and more tonight for "nightly business report" for this wednesday, june 25th. good evening, everyone. i'm susie gharib. >> i'm bill griffeth in for tyler mathisen. once again, rally ruling by the supreme court today was a major victory for tv broadcasters in their lawsuit against startup
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online tv service aereo. the charge was violating copyrights on their programs and not paying transmission fees. shares of cbs and other broadcasters involved in the lawsuit rose higher today following the ruling. cbs shares led the way up by more than 6%. what does this mean for the media industry and will aereo strike up the deals for fade to black? >> reporter: this is a major win for the media industry ensuring that the media giants will continue to be paid by cable, satellite and internet tv companies for the right to rebroadcast content protecting a crucial and growing piece of revenue. >> what the consumer is guaranteed is that we will continue to do the same high quality premium programming that we've done and deliver it to them and there are plenty of places to get it. this is a proconsumer thing and
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fa frankly to say it is, is sour grapes. >> reporter: all the media giants that battled aereo in court applauded the ruling saying it's a win for consumers. >> i think the biggest thing is it does reaffirm they have the right to control when and how and where their content is broadcast. i think that's critical because it does allow them to continue to extract value from the content they make and own and have more if years. >> reporter: shares which invested in aereo declined with the chairman says i believe blocking this technology is a big loss for consumers. the ceo says the battle isn't over. quote, we will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact. we'll see if that entails paying media companies. the justices made a point to stress that this ruling should not have an impact on other cloud services and emerging
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technologies. for nightly business report, i'm julia boorstin. let's turn to tom edgen for his analysis. tom, certainly cbs benefits hearing ju hearing julia's story, what other media companies benefit? >> they can continue to charge remission fees and general media companies because they own the broadcaste broadcasters. lastly, for cable operators, it's a minor positive because there is less return to churn because you can't get aereo. >> what about the future of this technology that exists that aereo created? it's still there. it still would be a positive for consumers to be able to watch broadcast television using their mobile divisions using this technology s. there a future for that technology?
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>> i guess the question is does the company continue to operate with a significantly higher cost or do they shut it down? i guess if he sells it that could be interesting, especially if it's bought by an over the top company. >> this raises the question about disruptive invasion. here is a new innovative thing that consumers were excited about. what does this ruling mean for future invasions, especially in the media space? >> yeah, it's really unclear because what the supreme court said is aereo is like a cable operator. they are taking the signal and retransmitting it to customers. they said it's not like a xerox or library card. it's kind of unclear. certainly, we'll have innovators that will try to start new services. >> do you think that broadcasters themselves could do that? there was a time when they said if they lost the supreme court
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case, he would think of starting a company to compete. that wouldn't stop him from doing it now, would it? >> no, i think if they do start that kind of service, it does lower their rev lag. here they are creating something that competes with their customers. >> tom, you were telling me earlier that you think that this decision will open up a wave of mergers in the media space. what are possible linkups and what will that mean for consumers? >> well, i think with the consolidation on the cable side, you're seeing them get a lot bigger and there was a question that maybe the media companies had to get bigger, too, to compete with them. and i think the big question there was what would the broadcast's financial future look like? now that they can garner
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transmission. it obviously makes the value of the broadcasting groups that much higher. >> i was just going to ask you, he said today questions about advertising, that's still their business model right now and all technology aside. there were questions about the strength of advertising right now that maybe it slowed down a bit. he said that's not the case. how do you view advertising and do you like broadcasters right now as investments? >> well, i think, you know, you saw the broadcast move up today because it shows you, it was clear now they will get the fees that are significant. and i think that what we could see is merging of, say, broadcasters and non-broadcast companies because it helps them become more diversified. for example, we might see a cbs rejoin with viacom. >> that would be surprising. they join, they split and rejoin
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again? >> remember, the reason they split up was because the company didn't want cbs to drag down viacom. there is less reason for them to be separate. >> tom, a lot of interesting information. thank you so much. and nbc universal was among the broadcasting companies opposing. nbc universal is the parent company of cnbc which produces this program. a bombshell about the economy shrinking this past winter as brutally cold temperatures and snow was tougher on the economy than many of us earlier thought. first quarter gross domestic product, the sum of the goods and services produced in the u.s. and first three this year actually contracted by nearly 3%, far more than forecast. but that was then. since then, all that wicked winter weather ended and the economy has seen a turn around.
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as the chief economists predicts, there is a lot of growth expected in the months ahead. >> the gdp data seemed out of sync with the other data we had, independently derived. it doesn't pass the smell test. going forward, growth numbers will look better and, you know, with the economy building momentum and putting head winds behind us. >> maybe that's why on wall street investors shrugged off the gdp number and a 1% decline in durable good s for the month of may. stocks moved modestly higher. the dow was up 49 points, the nasdaq did well up 29, and s&p added nine points. but could confidence in u.s. economic growth mean higher interest rates as soon as next year? speaking in puerto rico today, the president of the new york federal reserve says market expectations that key interest rates could rise by mid 2015 are
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quote reasonable, but he added that forecasts often go a stray. elsewhere, house speaker john boehner said today he plans to file a lawsuit against president obama over the president's alleged abuse of executive power. the ohio republican said mr. obama exceeded his constitutional authority by pushing through executive orders without input from congress, especially on environmental issues and changes to the affordable care act. more accusations of banks behaving badly. a lawsuit against barclay's bank saying they committed fraud by misrepresenting the risks of an alternative trading system known as a dark pool but not disclosing prices and giving high frequency traders advantages over other traders. >> barkley grew the dark pool into one of the largest in the
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united states by telling investors they were diving into safe waters, when in fact, barkley's dark pool was full of predators who were there at barkley's invitation. >> so-called dark pools have come under scrutiny since michael louis published a book alleging the market is rigged in favor of high frequency traders. potentially major news in the oil markets. the white house is easing up on a ban in exporting u.s. oil allowing a hand full of companies to send certain oil products out of this country. oil prices rose nearly half a dollar a barrel on that news. the price of brent crude fell a fraction, but we're wondering what could this mean for the energy sector down the road. morgan brennan takes a look. two u.s. companies could begin exporting a new type of oil. a move that could put more pressure on the country's four-decade ban on oil exports. according to reports, the
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commerce department granted enterprise products partners to export conden sate as soon as august. it's a gas form of crude that's plentiful in u.s. shale formations like in texas. it can be easily converted into gasoline and jet fuel and commonly blended to allow for better pipeline transport. >> the market will probably go to asia. the numbers we run indicate europe wouldn't be a good market. you sent it to asia to run through the petro chemical observations to make various products. and so it's not a huge market for it. >> reporter: the condensate will be minuimally refined. crude oil has been banned from export since the 1970s, but products have not. experts say this could push the door open to a larger easing of
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that ban, especially as u.s. production climbs and geopolitical tensions mount. >> it could be the beginning of the easing and as a result of this, you'll see more crude oil more of this light crude oil put through the stabilization units and take the export. remember, we've been able to export products in this country, gasoline, diesel, et cetera. the conden sate, there was a question whether that could be exported. >> reporter: the u.s. produces over 8 million barrels of oil per day, 60% more than 2005 when u.s. production was at the lowest level. condensate is a fraction of that total. while america is enjoying the largest output since 19 88 it's unlikely congress could consider. with midterm elections looming and gas prices on the rise, for "nightly business report", i'm morgan brennan. as morgan just reported, it was a good day for shareholders of pioneer and enterprise, the
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only two companies so far getting the okay to start exporting oil. shares of pioneer natural resources jumped 5%. shares of enterprise product up more than 1%. but it was a different story for american oil refiners. they may have to start paying higher prices for crude as more is exported out of the country. shares of valero, western, marathon and tesoro sharply lower today. certainly u.s. oil exports could bring global crude prices in check, but what a lot of consumers really want to know is will it mean cheaper prices at the bump? jackie deangelis takes a look. >> reporter: first, it was russia and ukraine, now iraq. geopolitical tensions keeping oil prices high, but the rise comes as the u.s. is ramping production, raising the question is now the time to lift the 40-year-old ban on oil exports? proponents say exporting domestic crude would ease price tensions in the global
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marketplace and it may be washington is listening. the wall street journal reporting that u.s. officials allowed two companies to export ultra light crude. >> we have wgi crude oil, $106 a barrel, brent crude oil $114 a barrel. if you open up the wti to the world markets, of course the world market will go for the cheaper crude oil. >> reporter: while exporting could bring global prices down, it would raise prices here at home bringing domestic crude more in line with the international benchmark. >> it makes the crude oil produced here in the united states more viable, more attractive to the world energy markets. >> reporter: high oil price haves a trickle down effect, consumers feel it when they heat and cool their homes, they also feel the pain at the pump. >> everything is going up. that's the way the economy is working. >> i have a gas guzzler, i have
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a chijeep so i ride my bike. >> i just go one day a week now. >> reporter: deutsche bank says every benny increase accounts for a billion dollars in energy consumption and the billion dollars presumably not spent elsewhere. gas prices are 13 cents higher than this time last year according to aaa and tradeers say that we could see another ten to 15 cents in the coming weeks. for "nightly business report", i'm jackie deangelis. >> still ahead, serial killer. americans are changing what they eat for breakfast so what companies are keeping up best with consumer taste?
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another setback for general motors. according to reuters, the auto maker is saying to stop selling now and used 2013 and 2014 chevrolet cruz sedans because of potential problems with the air bag. they recalled 17 million vehicles in the united states. >> earnings from general mills, the maker of chieeros and lucky charles. profits rose by 10% last quarter but most due to cost cutting. earnings were still below forecast with total sales sliding by 3%. investors lost their taste for the cereal giant sending shares down today. one of the challenges general mills and cereal makers
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are facing is a big shift in what americans eat for breakfast. what food companies are bringing to the table to satisfy consumers. >> reporter: the big brands behind our breakfast are scrambling to keep up with the major shift in the way we eat. sales of cereal have been declining for over a year and there is no sign of a turn around. that's hurting companies like general mills that makes and chex. they are trying to launch new products and advertising to inform people cereal is healthy and has natural ingredients. >> we're rolling out great taste focused renovations, more cinnamon on cinnamon toast crunch and consumers are seeking more protein at breakfast and we're responding. >> reporter: kellogg is feeling the pain. the maker is launching cereal pouchs or snacks to get people
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eating cereal at other times of the day. while cereal is declining, yogurt is booming thanks to the high protein content and greek yogurt. >> retail sales of greek yogurt grew 41% and the share is running at 10%. in audition, our original style yoplet has results strengthening in recent months. >> reporter: in 2003, only 1/3rds of adults ate yogurt regularly. now half of the adult population eats it. it's the private companies that are reaping the biggest benefits. there is another shift in the way we start the morning, eating out. looking at traffic patterns for restaurants across the country, breakfast is actually the only time of day that is experiencing growth this year. that explains why burger king, starbucks, duncan brands and
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taco bell are chasing after the mcdonalds customer. what who wins in the world of breakfast eating? dave palmer sticks starbucks but that doesn't mean general mills and kellogg are losers as they pivot, traders and analysts are speculating the sector would be ripe for a deal. that's one reason their stocks have held up real tefrelatively. for "nightly business report", i'm sarah eisen. a new chapter for barnes & noble, it is spinning off its nook digital book business. that's where we begin tonight's market focus. the book seller is hoping to up shareholder value by splitting it's company into two divisions, one including the nook and college textbooks and the other will include the retail business. it expects to complete the separation by march of next year and by the way, the company reported a smaller quarterly loss today so shares popped more than 5% to close at $21.65.
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elsewhere, a dip of earnings in the third quarter but results still beat and announce add big share buy back plan which sent that stock higher, as well. it blamed lower sells of biotech sales but expects a bigger feature. the seed and pesticide maker raised the 2014 outlook and announce add new two-year $10 billion share repurchase program, the biggest ever. that stock up 5%, closed at $126.73. by the smallest amount of decline in a year. the for profit education provider is struggling lately with declining student regular stations at the schools like the university of phoenix. shares up more than 6% today. medical action the maker of disposable medical and surgical products surged on news that its
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being acquired by health care logistics company for more than $200 million. that purchase gives owens better access to cost effective and specific equipment. shares of medical action nearly doubled, get that, up 93% to 13.68 sha$13.68 share. shares closed at $35.38. it's a two billion deal and the contract runs through the year 2022. december speed that shares of lockheed were off to $162.45. mainhaynes is buying db app. it lets haynes expand in europe. shares jumped to 9 6.72.
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bed bath and beyond shares fell after quarterly earnings that missed estimates. sells came in below and earnings guidance. the stock fell as much as 7% in half hours trading. the stock was up a fraction to 61.11 in the regular session. a warning today from a federal financial regulator about a return to perhaps risky bank lending. the office of the comptroller said low interest rates and tough competition are leading banks to loosen lending standards again and that could mean more risky loans are being made right now. another stern warning, this time from robert mertin. the professor said 401 k retirement accounts are facing a crisis. he says that administrators need to overhaul from target date funds and the obsession of returns he suggestions they
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focus on the amount of sustainable income employees should expect to receive after they retire. coming up, investors got a peak inside google's product line, you will, too. were they impressed? we'll find out. well, the faa is grounding the commercial use of delivery drones. the plans by companies like to use drone aircraft to make deliveries for other commercial uses will not happen. they are illegal it says, the faa does allow drones to be flown for fun as long as they are kept below 400 feet.
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talking about final, a lot of buzz about google from the annual developer's conference. shares rose more than 2% after the company unveiled a big update in extension for the android operating system, as well as new warble gadgets and a smart home device. josh lipton has more. >> today we're happy to announce android auto. >> android tv. >> android wear. >> reporter: it's an android world, that was the theme of the google developer's conference. it wants users on its operating system no matter where they are, at home, at work, even in their cars. >> we've redesigned the android platform for automotive making it easier and safer for the services drivers want in the car and most importantly, android auto is completely voice enabled. you can keep your hands on the wheel and the eyes on the road. >> reporter: in audition to cars, google wants to push
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harder into your living room. >> we're simply giving tv the same level of attention as phones and tablets have traditionally enjoyed. >> reporter: it introduced android tv, a new platform that allows you to access and organize your media content. it will be available later this year and inside tvs in 2015. >> it's finally possible to make a powerful computer small enough to wear on your body. >> a theme at this year's conference, new wearables. demand is strong. 19 units will ship this year, that's triple last year, according to idc. bottom line, google wants to broaden and strengthen the echo system, be everywhere you are. josh lipton, "nightly business report" san francisco. >> finally tonight, here is something you don't see every day, even in new york city. a chinese tycoon bought lunch for 200 homeless and he's saying
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we are the world. and even handed out a few $100 bills for the shelter convinced him to donate the money instead of the $300 in cash he promised each guest. he says he wants to improve relations between the u.s. and china and disprove the image of rich chinese spending their money on luxuries only. >> he's off to a good start. >> yes, he is. >> that's "nightly business report" for tonight. thanks for joining us. i'm susie gharib. >> i'm bill griffeth. have a good evening. we'll see you tomorrow.
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tonight on "quest" -- giant ground sloths. saber-toothed cats. columbian mammoths. camels. it's not africa. it's your neighborhood 20,000 years go. join us as we journey back in time to a long-lost bay area full of surprises. and solar eclipses have been the focus of obsession and awe since the dawn of civilization. and even today they continue to provide both inspiration and important scientific information about our sun. major funding for "qst


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